student

Student loan giant Navient and borrowers settle lawsuit over troubled forgiveness program

Student loan giant Navient (NAVI) promised to revamp a loan forgiveness program designed for public servants after settling a 2018 class action lawsuit from student loan borrowers.

The preliminary settlement — still subject to final approval by the court — requires Navient to “enhance its internal resources, maintain regular training and monitoring for call center representatives, update forms that are sent to borrowers and update its website.”

Part of the settlement involves Navient providing $1.75 million to a nonprofit organization that will provide education and student loan counseling to public service workers. The 10 plaintiffs, all student borrowers, will receive $15,000 each.

“This exceptional agreement is a big step forward that will help millions of borrowers get the relief they need—and were promised by the federal government—by enhancing the resources available to them through their loan servicer,” Randi Weingarten, president of the the American Federation of Teachers, which backed the

Read More

Billionaire who paid off Morehouse student loans: I still experience racism

Netflix (NFLX) CEO Reed Hastings and his wife Patty Quillin are committing $120 million to the United Negro College Fund and historically black higher education institutions Spelman College and Morehouse College. The donation, the largest of its kind, was partly inspired by Robert F. Smith, CEO and chairman of Vista Equity Partners, who last year announced that he would pay off the student debt of about 400 Morehouse College students.  

Smith joined Yahoo Finance to discuss the Hastings donation, education inequality, and corporate America’s push for diversity.

“I’m encouraged by the fact that we’re seeing business leaders like Reed and Patty saying, listen, we are going to do something about it. You know, we have centuries of systemic racism and it has been playing out in the form of educational disparities, health care disparities, and economic disparities. … [It’s a] dynamic that we’re really facing as an urgent crisis around

Read More

Two public servants describe the government’s troubled student loan forgiveness program

Congress created the Public Service Loan Forgiveness Program (PSLF) in 2007 to help various kinds of public service workers erase their student debt after ten years of loan payments.

But management of the program is widely considered to be a failure as more than 98% of applications from teachers, firefighters, police, and other public servants are rejected.

Education Secretary Betsy DeVos has been sued multiple times over her department’s high denial rate, while Education Department (ED) officials contend that Congress designed the rules to be too restrictive.

To better understand the PSLF process, Yahoo Finance spoke with two public servants who tried to use the PSLF program to get their student debt discharged.

San Bernardino County firefighter Javier Marquez uses a water hose to douse a massive warehouse fire on 2200 block of West Lugonia Avenue in Redlands. 2200 block of West Lugonia Avenue on Friday, June 5, 2020 in

Read More

Assessing the latest big idea for fixing the U.S. student loan crisis

One of the solutions being floated involves income-share agreements (ISAs), a type of financing where a student pays for education by paying a percentage of their income after graduation.

“Over the last several years we’ve certainly seen a resurgence and the interest in using income-share agreements to finance higher education, and potentially for other uses as well,” Joanna Darcus, a staff attorney at the National Consumer Law Center, told Yahoo Finance. “And that the interest is primarily driven by financial companies, FinTech platforms, venture capitalists, and some institutions who are interested in exploring the model.” 

While not a new idea, politicians and experts are currently debating the pros and cons of ISAs.

In June 2019, after an Education Department (ED) official revealed that the Trump administration was considering a federal ISA program, Senator Elizabeth Warren (D-MA) joined Representatives Ayanna Pressley (D-MA) and Katie Porter (D-CA) in writing a letter to … Read More

Student loan borrowers sue Betsy DeVos and Steven Mnuchin over seized tax refunds

Consumer advocates are suing Education Secretary Betsy DeVos and Treasury Secretary Steven Mnuchin for their departments’ failure to stop seizing student loan borrowers’ tax refunds to pay for their defaulted loans, despite declaring that it would stop doing so on March 25.

The class action suit was filed by nonprofit organizations Student Defense and Democracy Forward against the Department of Treasury, the Department of Education (ED), Steven Mnuchin and Betsy DeVos on May 29 in the United States District Court for the District of Columbia.

The group alleges that despite millions of Americans losing their jobs amid the pandemic, the Treasury has seized more than $18 million in tax refunds from over 11,000 borrowers in April 2020.

“In the middle of this devastating pandemic, Secretary Mnuchin and Secretary DeVos have been illegally offsetting tax refunds of student borrowers despite clear instructions from Congress and the President to stop,” Alice Yao,

Read More